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Blockchain Use in Donations in the UAE

Last Updated on May 31, 2024 by Hamza Khan

When people donate to a cause, they don’t give much thought to whether their funds reach the intended cause. One cannot fault these people, as verifying whether the donations met the need can be almost impossible. This is one issue that blockchain technology can solve without any issues. 

Donations in the UAE

The United Arab Emirates (UAE) has a strong culture of giving and philanthropy. Private individuals and businesses actively participate in charitable activities. They support both international causes.

Federal Law No. 3 of 2021 Concerning the Regulation of Fundraising Activities oversees and regulates the fundraising activities and donations for charities in the UAE. This law sets the guidelines for charitable contributions and governs the operations of non-profit organizations. It applies to any association seeking to collect or provide donations within the country, including the mainland and accessible zones. The law’s primary goal is to safeguard fundraising from the risks of exploitation for terrorism financing and illegal activities.

Blockchain in Donations in the UAE

Blockchain and cryptocurrency use in the UAE is rising. Individuals, corporate bodies, and even the government. Earlier in the year, the UAE announced that authorized government entities and authorities can accept donations in Bitcoin and other cryptocurrencies during Ramadan.

Mohammed Naqi, Director of the Non-Benefit Public Associations Department, and Mona Khalil, Director of Government Communications, highlighted unauthorized individuals or entities collecting funds during this period could face fines up to Dh500,000 or imprisonment.

Naqi specifically warned that those collecting or receiving donations from outside the UAE without proper authorization could be fined at least Dh500,000 or face imprisonment. Moreover, misappropriating donation funds could lead to fines ranging from Dh150,000 to Dh300,000, along with potential imprisonment.

There were about 34 approved entities. These authorized entities were made up of charities and government bodies. They were allowed to receive donations in Bitcoin and other cryptocurrencies.

Final Words

Donations and charity are a core part of the UAE’s culture. This year, the country added donations to the list of cases using blockchain technology. The country received Ramadan donations in Bitcoin and other cryptocurrencies.

Frequently Asked Questions 

Are Donations Allowed in the UAE?

Yes, donations are allowed in the UAE. Anyone in the country can donate to a cause they find worthy.

How is Fundraising Conducted in the UAE?

Licensed charities or humanitarian organizations in the UAE conduct fundraising activities.

What is Blockchain Fundraising?

Blockchain fundraising involves using blockchain technology to raise funds for causes, projects, or organizations.

What is Proof of Donation on the Blockchain?

Proof of Donation is a method that uses blockchain technology to show verifiable and transparent records of charitable donations. 

What are the Potential Benefits of Using Blockchains to Receive Donations?

Some potential benefits of using blockchain to receive donations include the elimination of middlemen, transparency, efficiency, etc.

Do NGOs Use Blockchain Technology?

Yes, NGOs use blockchain technology.

Which Bank uses Blockchain Technology?

Banks using blockchain technology include JPMorgan Chase, Swedish Central Bank, HSBC, etc.

Which Government uses Blockchain?

Governments in countries such as the UAE, Sweden, Estonia, the UAE, Georgia, etc., have implemented blockchain technology.

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